Renewable energy investments need to make business sense.

Sunday, January 30, 2011

By Asher Price
Express-News Editorial Board
San Antonio Express-News

Mayor Julián Castro wants San Antonio to be at the forefront of green energy only partly because of concerns about greenhouse gases and the environment. He also believes innovative energy technologies can and should be an economic generator for the city.

San Antonio has many of the academic and research institutions in place to make Castro’s vision for the energy sector a reality. But what really gives the green jobs initiative substance is the city’s municipally-owned utility — CPS Energy.

CPS is already the nation’s largest municipal buyer of wind energy. As part of its Vision 2020 goals, the utility has plans to add 100 megawatts of nonwind, renewable energy — presumably solar energy — to its portfolio over the next decade. In pursuit of these goals, CPS has committed $50 million to a 10-year partnership with the Texas Sustainable Energy Research Institute at UTSA.

In November, officials cut the ribbon on the 140-acre Blue Wing site in Southeast Bexar County, the state’s largest solar farm. CPS has a contract to buy all the power from the 14-megawatt Blue Wing facility for 30 years.

At a clean energy forum this month, CPS Energy CEO Doyle Beneby said he would leverage economic development in green energy with a request for proposals to build up as much as 50 megawatts of solar energy generation. The goal is to encourage solar manufacturing and assembly industries to locate to San Antonio.

In the utility’s contracting, he told Express-News staff writer Tracy Idell Hamilton, We’re starting to ask, "What’s in it for San Antonio?’" Beneby also suggested that rather than enter into contracts to purchase renewable energy from facilities owned by other companies, CPS might in the future seek to own those facilities outright.

What makes all this possible is that CPS — while being a municipal utility — is also a well-run business that over the decades has made smart decisions about diversifying its energy portfolio. There’s good reason to believe that prudent investments in renewable energy sources will pay off in the future, just as CPS investments in nuclear power and coal-fired plants while gas was relatively inexpensive have ultimately benefited customers.

Massachusetts Gov. Deval Patrick also had dreams of making his state an industrial powerhouse of green energy. In pursuit of that dream, the state in 2007 provided $58 million in taxpayer incentives to a solar energy company — which this month announced it was closing down its Massachusetts factory, eliminating 800 jobs and shifting production to China.

Beneby told the newspaper that any new investment must be made as a business case first. That’s a prerequisite that utility and city leaders need to maintain because despite all the promise of renewable energy and all the potential green industries might hold for San Antonio, there’s still plenty of risk.

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